How much tax do we pay?

In my small business, for every dollar that comes in almost half of it goes out in tax: GST, PAYE, FBT, ACC and in the event there is anything left over, income tax comes clobbers a third.

So, I was pleased to see John Key elected. National has a set of principles. These include limited government and personal responsibility. They have had nine years to implement their principles. How have they done?

When Bill English became minister of finance government spending was $60 billion. It is now $80b. Sovereign debt was a mere $10b when National took office. It is now $60b. In nine years of relatively unfettered power, National has failed to roll back a single penny of the welfare state, failed to confront the disaster of the Resource Management Act, unwind restrictive building regulations or do anything consistent with their stated principles.

This is a centre-left government Norman Kirk would have been proud to lead.

So how much tax do we actually pay? PAYE has different rates of tax at different thresholds, plus there is ACC Earner Levy. And we get taxed on interest earned or gains in investments – including on our Kiwisaver. And on top of that we get taxed on all the goods and services we pay for.

PAYE has different rates of tax.

Income up to $14000, taxed at 10.5%

Income over $14000 and up to $48000, taxed at 17.5%

Income over $48000 and up to $70000, taxed at 30%

Remaining income over $70000, taxed at 33%

Plus the current ACC Earner levy is 1.39% on top of that, up to earnings of $126,286.

32 Comments

Patzcuaro

“So, I was pleased to see John Key elected. National has a set of principles. These include limited government and personal responsibility.”

Limited government and personal responsibility works well if you already have an asset base, say via inheritance, or are in a high paying job. It doesn’t work so well if you start out without a leg up from your parents or have a relatively low paying job.

I imagine most of the people pushing for limited government and personal responsibility belong to the first group. Unless there are more people in the first group than the second, basically more wealthy people than poor people, we are going to get governments of the current variety.

This does mean that that people shouldn’t take personal responsibility, they should but it is not enough in the current environment.

PDB

“This does mean that that people shouldn’t take personal responsibility, they should but it is not enough in the current environment.”

I disagree – there is far too many people, even those well-off, pulling in some form of benefit or subsidy whether that be working for families, sickness when not sick or rich kids getting ‘free’ (not to the taxpayer) student loans.

If all those people were told to fob off the people really in need would be far better off.

David

The fundamental problem with benefits systems is that they tend to regress to the lowest level sustainable for people who barely exist. Instead of being a reasonable level of support through challenging times, they become an absolute bare minimum for long term subsistence.

Mr Grant has got it wrong right at the start. GST is a tax on his customer, not his business . PAYE is a tax on his staff, not his business. . His business is able to claim all its expenses. Mr Grant only pays tax on his share of the profit.

David

Kitty Catkin

I was astonished when I saw what my medication would cost if I had to pay the full rate-it was staggering, and I wish that I could remember it. There is no way that I could afford it if I had to pay that, the savings account would have been empty years ago.

Patzcuaro

Kitty Catkin

Well, someone’s paying for mine. I will never again complain about the cost of prescriptions !!!

Vet medicine-ouch. I know someone who has her dogs flea’d and wormed at the vet & the cost is eye-watering,.Why she doesn’t buy worm pills & flea whatevers at the supermarket, I don’t know. Nor do I know why ordinary flea collars went out of production-was it because a few animals had allergic reactions to them ? In that case, stop using them for your pet . None of mine ever had any problems (rant, rant)

Gezza

Kitty Catkin

Thank you. I had no sucess with Spot-On when the first Siamese was a flea farm one very dry summer which was heaven for fleas, but a cheap Pam’s flea collar killed the little buggers instantly-24 hours later, only one was seen and that one soon went to join the others.